- Sale-leaseback increases shareholder value and improves liquidity. SLB releases capital tied-up in a low returning asset and allows a company to invest in core asset/business or repay existing debt.
- Cash carries a 100% weighting in the bank’s tier one capital ratios, vs. 25% weighting for owned real estate.
- SLB are immediately accretive to the equity shareholders.
- Shareholders invest in company’s core business not real estate holdings.
- Convert Non-liquid asset to cash and retain control of property.
- Move capital asset off at book value from balance sheet; replaces with cash.
- Improve balance sheet ratios; operating lease allows asset to be transferred off balance sheet; pay down debt improves balance sheet & debt ratios.